Cheshire Mortgage Broker» switch fixed rate

Fixed Rates On Their Way Up!

admin — Sun, 29 Mar 2009 06:48:28 +0000

It appears that Fixed rates could well have bottomed out and may now start going up again. Market rates which control fixed rate pricing have increased last week from 2.96% to 3.15%. This means that it is likely that fixed rates will start going up again over the next week or two.

The increase in market rates is due to a rise in inflation and the government’s failed gilt auction which has left market confidence shaken in these uncertain times.

There are over a million homeowners currently on the standard variable many of whom are waiting for interest rates to drop to their lowest. For fixed rates that could be now. The Bank of England has signaled that it is reluctant to lower rates further than 0.5%. All of these factors point to a bottoming out in rates.

A lot of financial experts are hinting that fixing for 5 years could be a very good idea to ride out the storm.

If you are on the standard variable rate and are thinking about moving to a fixed rate mortgage now would be a good time to start looking. Speak to your adviser or alternatively (if your adviser hasn’t spotted this change in the markets and contacted you accordingly) if you would like a quote from us call us on 0870 080 2343 or complete the mortgage enquiry form. We are FEE FREE mortgage brokers offering whole of market advice.

Should I Switch My Fixed Rate Mortgage Now?

admin — Wed, 11 Mar 2009 17:19:39 +0000

A few years ago it was rare to find a fixed rate worth switching to even if it meant paying redemption penalties on your original rate. Times have changed recently and fixed rates have dropped very quickly indeed. 18 months ago a five year fixed rate of 6% was quite a good rate. Now, however a five year fixed rate can be as low as 4.44%.

The question remains then. Is it worth paying redemption penalties with your existing lender and remortgaging to a new lender? In some circumstances, yes, it is.

Here’s an example of a recent remortgage that we arranged. The client had a 5 year fixed rate at 6.19% with 44 months to go until end of redemption penalty. The redemption penalty was £2600. The new rate we found was 4.69% which represented a £112 per month saving. Even when taking into account paying the redemption penalty and the new mortgage arrangment fee, the saving over the 44 months was £1329 which equates to £30 per month. £30 per month is better off in your pocket than a lender’s so it is definitely worth remortgaging and paying that redemption penalty. Of course, this depends entirely on your circumstances but it is worth you having a look to see if you can save money during this recession. If you would like further advice please use the enquiry form or call us on 0870 080 2343.